National Class Action Gender Bias Suit Filed Against Costco – Press Release

For Immediate Release
August 17, 2004
Press Contact
Trudi Frazel (510) 845-3473 ext. 301
or email tfrazel@impactfund.org

NATIONAL CLASS ACTION GENDER BIAS SUIT FILED AGAINST COSTCO

San Francisco, CA, August 17, 2004 — A Costco assistant warehouse manager today filed a national sex discrimination class action law suit today in federal court in San Francisco. The suit charges that Costco imposes a “glass ceiling” that denies women promotions to high paying assistant and general store manager positions.

Costco operates approximately 320 warehouses in the United States employing over 78,000 workers. The proposed class consists of current and former female Costco workers across America who have been subjected to gender discrimination. Only 1 in 6 Costco managers are women, yet its workforce is nearly 50% female. The suit seeks lost pay and benefits, damages and injunctive relief for the class.

“There is no clearer example of a glass ceiling than how Costco promotes workers into assistant manager and general manager positions,” said Brad Seligman, executive director of the The Impact Fund, lead counsel for Ms. Ellis. “There is no promotion system at Costco – women must rely on the subjective and arbitrary decisions of Costco’s all male senior management. Not surprisingly, the men at Costco get a better deal when it comes to promotions.” Mr. Seligman is also lead counsel in the landmark case of Dukes v. Wal-Mart, which a federal judge recently certified as a national class action.

The complaint charges that Costco has no job posting or application procedure for assistant manager and general manager positions, nor any written promotion standards or criteria for these jobs, in contrast to lower level jobs. The suit alleges that under this “non-system,” discriminatory conduct is allowed to flourish. Higher level management at Costco is virtually all male – all of Costco’s operations vice presidents are male, and only 2 of its 30 executive and senior officers are female. It is believed that over 650 current and former Costco female employees were eligible for promotion to the assistant and general manager positions over the preceding three years.

“The best paying jobs at Costco are for general managers, who are typically paid $100,000 or more in salary and bonuses and are eligible for stock options worth many times this amount,” explained Bill Lann Lee, a Lieff Cabraser partner and the former Assistant Attorney General for Civil Rights, U.S. Department of Justice. “Even though women hold nearly half of the lower level jobs at Costco, women hold only about one in six of the senior manager positions.”

“Costco generates $42 billion in annual revenues,” stated Steven Stemerman of Davis, Cowell & Bowe, LLP. “Much of these revenues are attributable to the hard work performed by its female warehouse employees. These workers deserve the same opportunity as their male counterparts for promotion into management positions at Costco.”

The suit was filed by Shirley “Rae” Ellis, an assistant manager in Costco’s Douglas County, Colorado warehouse. Ms. Ellis, a former general manager at a Sam’s Club, was promised rapid promotion at Costco when she joined it in 1998. Despite these assurances and a record of excellent performance reviews, Ms. Ellis was repeatedly denied promotion to warehouse manager positions, including many openings in California that she only learned about after they were filled.

After Ms. Ellis filed her charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC), the complaint alleges that Costco retaliated against her by transferring to new warehouse far from her residence, requiring a multi-hour commute.

The class action suit is entitled Ellis v. Costco Wholesale Corporation, Case No. _________.

Further Information

Current and former Costco employees wish to learn more about the lawsuit, or report their work experiences at Costco, should visit www.genderclassactionagainstcostco.com or call class counsel toll free at 1-866-501-2300.

Members of the media can also obtain a copy of the complaint and this press release by visiting www.genderclassactionagainstcostco.com.

About the Plaintiffs’ Attorneys:

The Impact Fund is a nonprofit nonprofit civil rights organization based in Berkeley, California. It is the only foundation dedicated to providing funding and technical assistance and representation for complex public interest litigation in the areas of civil and human rights, environmental justice and poverty law. To learn more about the Impact Fund, please visit www.impactfund.org.

Lieff Cabraser Heimann & Bernstein, LLP is a 50-plus attorney law firm with offices in San Francisco, New York, Washington, D.C., Beverly Hills and Nashville. Lieff Cabraser represents plaintiffs in a wide range of class action cases, including employment discrimination, wage and hour and pension benefits litigation. Since 1992, the firm has litigated 23 separate cases in which $100 million or more in jury verdicts were rendered or settlements were reached, including 11 cases valued at $1 billion or more each. Please visit the firm at www.lieffcabraser.com.

Davis, Cowell & Bowe, LLPis a labor and employment firm that represents workers in numerous class action discrimination cases, including the Wal-Mart gender discrimination case representing a class of over 1.5 million women.

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